Sports Direct reports profits upgrade

SPORTS Direct International buoyed staff and investors with a profits upgrade yesterday as the sportswear retailer held its annual conference for employees and suppliers at Newcastle United FC’s St James’ Park stadium.

Mike Ashleys Sports Direct staged its upgrade meeting at St James Park, home of Newcastle United, also owned by Ashley. Picture: Getty

The group, controlled by the football team’s billionaire owner Mike Ashley, said annual pre-tax profits were running ahead of consensus market expectations of £295 million.

Sports Direct also confirmed underlying earnings were in line with forecasts for £380m, which will trigger a multi-million pound share payout in September under the staff bonus scheme.

This year’s annual underlying earnings target of £300m was the last hurdle for the payout under the 2011 employee share bonus scheme.

The scheme is set to pay out five million shares this September and a further 19 million shares in 2017, worth more than £34m and £130m respectively at today’s prices to eligible staff.

On the stock market, shares in the company closed up 4.2 per cent at 686p after the unexpected profits upgrade. Sports Direct held its annual conference at St James’ Park after Newcastle United narrowly avoided relegation on Sunday by beating West Ham 2-0.

The retailer laid on food, drink and entertainment for about 900 staff and suppliers at the all-day yearly conference.

Elsewhere in the retail sector today, B&Q owner Kingfisher posted a 1.1 per cent first-quarter slide in same-floorspace sales at the DIY chain in the UK and Ireland.

Sales of outdoor seasonal and building products fell 4 per cent in the 13 weeks to 2 May. A better performance from Kingfisher’s trade-focused building supplies chain Screwfix, where like-for-like sales leapt 15.4 per cent, helped the group’s overall UK and Ireland division to increase comparable sales by 1.6 per cent.

Kingfisher chief executive Veronique Laury, who succeeded Sir Ian Cheshire in December, said the group was making good progress with its overhaul.

She announced in March that as many as 60 stores would close over the next two years, resulting in about 3,000 job losses in the UK and Ireland. Alluding to that restructuring, Laury said: “Our first ‘sharp’ decisions are being worked on at pace.”

The group added it has agreements to offload around a quarter of the stores earmarked for closure.

Kingfisher said its UK and Ireland business was up against strong comparatives from a year earlier, when like-for-like sales rose 9.7 per cent.

Meanwhile, discount chain operator B&M European Value Retail revealed that underlying annual pre-tax profits rose 55.7 per cent to £135m in the year to 28 March, compared with £86.7m in the previous 12 months.

Group revenues lifted 29.5 per cent to £1.6bn. Sir Terry Leahy, the former chief executive of Tesco who is now chairman of B&M, said: “It is pleasing to report to shareholders that in B&M’s first year as a public company it has delivered strong increases in sales, profits and cash generation.”